In an interview, Nicole Burth and Stefan Pfister discuss the challenges currently faced by businesses and employees in today’s labor market and the extent to which the government should intervene with regulatory changes.
Nicole Burth: The biggest challenge across almost all industries is finding the right specialists and skilled employees and retaining them once they have been recruited. Skilled workers specialize in one particular area. For us this means people with an apprenticeship, specific training or an academic education. In Switzerland there has been a boom over the last two years, which has been accompanied by low levels of unemployment. As a result, employers are on the lookout for well-trained people. But it is often not possible for companies to find the job profiles they are searching for on the labor market. For example, we need a lot more technical staff and IT specialists.
Nicole Burth: Yes, definitely. Switzerland is one of the most attractive countries for well-trained people. At the World Economic Forum we presented a study called the “Global Talent Competitiveness Index” which identified Switzerland as the most attractive country for skilled employees from all over the world for the seventh year in a row. Switzerland is a very appealing location for qualified people from inside and outside its own borders. However, we are currently seeing a mismatch between supply and demand.
Stefan Pfister: This is also a problem for us. We would like to bring more specialists into Switzerland to work in certain departments, but we are restricted by the migration policy quotas. We need the ability to be much more flexible, particularly in our project work.
Stefan Pfister: The challenges we face are much more far-reaching. We are increasingly looking for job profiles on the labor market that don’t even exist yet. That is partly due to academic courses which, although they are developing, are still lagging behind the market requirements. The result is that we have to train specialists ourselves. On the one hand it is great to be able to offer our people something really exciting, but on the other hand it is not without its problems from a business perspective. We are turning into an extension of the academic world, which is leading to high training costs and, at the same time, a high level of fluctuation. In the long term this is not a particularly attractive prospect. Of course, I understand that young people want to gain new experiences, often in other countries, after they finish their education.
Stefan Pfister: The reasons for this are the fundamental transformation in the economy, which is driven by digitalization and globalization, and changes in society. Our circumstances, including the way we are living, what we are producing, what we want and how we are consuming, are all leading to constant transformation and to rapidly changing job profiles on the labor market.
Nicole Burth: Yes. A recent study shows that, in the next 10 years, six out of every 10 graduates will be doing a job that does not even exist yet. We need to be able to deal with these developments and they are also accompanied by demographic change. Today Switzerland has around five million people in employment. It is estimated that the number of people who have retired by 2030 will be around half a million more than the number of young people joining the labor market from school or vocational education. That amounts to 10 percent of the Swiss working population, with an unemployment rate of around two to three percent... This trend alone presents us with huge challenges. It is true that around 20 percent of jobs will disappear as a result of digitalization, but just as many new jobs will be created.
Stefan Pfister: But with quite different job profiles!
Nicole Burth: Exactly, with completely different profiles. For example, in the past the Swiss Post mail sorting center in Mülligen covered the canton of Zurich, but now it is responsible for the whole of German-speaking Switzerland. Adecco used to have 800 people working there, but Swiss Post has automated a lot of processes and now the figure is 120. However, these 120 people have quite different qualifications from their 800 former colleagues. This example shows that business and society need to find new ways of providing lifelong training so that we can keep people in the labor market.
Nicole Burth: Workers need to be better qualified in all respects. The job descriptions and the skills that are required are becoming more technical, more digital and more collaborative. Teamwork is an important quality on all levels in the world of work nowadays.
Stefan Pfister: Future job profiles will also require much better communication skills. However, I’m not sure whether the same number of jobs will actually be created to replace those that are disappearing, and whether enough alternatives will be available for less well-qualified workers. I can see this presenting us with challenges, especially in the Western world. It will give rise to social tensions that we cannot really assess at the moment.
Nicole Burth: An area where a lot of new jobs have been created over the last 10 to 20 years, and not just for highly qualified employees, is the service industry. This includes domestic cleaning, care for the elderly and even dog walking. I am sure that we will see a lot of demand for people to work in the caring professions in the years to come.
Nicole Burth: I don’t know whether the timing will be right and the transitions will always match up, but if we can be clever and anticipate the fact that in 10 years we will have 10 percent too few working people on the labor market, then I am confident that it will work out. What I worry about is that we might not have people with the profiles we need. This is where we have to take action.
Stefan Pfister: We must overcome these important challenges by offering appropriate types of education and training. The fundamental question here is to what extent the state is prepared to pay for training for people who are less well-qualified, because these people often do not have enough determination or enough money, which reduces their chances of succeeding.
Nicole Burth: The Adecco Group is calling for a new social contract. It is essential for funding to be made available to pay for this training. We also need to motivate and encourage people to take part. For people who have not attended school or training for a long time, this is particularly difficult. Together with other companies from the temporary staffing industry, we have started a fund to provide training for temporary workers. However, the problem is that very few people are making use of it. Training is rather like sport; if you haven’t taken part for a long time, you need to make a big effort to get started again.
Stefan Pfister: There is a wide range of options available. On the one hand there are internal corporate training programs. Understandably, these are intended primarily to cover the company’s own needs, interests and technical fields. Another equally important factor is mobility and this relates to a number of different aspects, including the flexibility of each individual and their readiness to try new things, acquire new experiences and perhaps to go abroad. Companies must also be able to offer young people interesting prospects that they can work toward by taking the appropriate training courses. However, I do not believe that every course should be linked to a promise of moving on to the next career stage. Training should help people to develop personally and should also be enjoyable for them.
Nicole Burth: I think that there will be a lot of competition for skilled workers in the future. This means that every company will have to present itself as an attractive employer in order to recruit good people. Employers will also need to offer their employees more flexibility in terms of working hours and workplaces. In addition, they must be able to convey a sense of purpose. Younger people want their employers to represent a cause and to have a vision and a mission.
Nicole Burth: In Switzerland there are indeed many people who do not have a good education. We need to find ways of improving the employment rate among this group, perhaps by offering them training courses. We also need to think about how we can continue to employ specialists beyond retirement age. Flexible labor market models could help in this respect by not requiring people necessarily to work full-time.
Nicole Burth: We all know people over 50 who were let go. That’s very difficult for them on a personal level and it’s also not easy to find another job. But when we look at the figures, it becomes clear that the unemployment rate is not higher among the over-fifties. On the contrary, people over 50 have a slightly lower level of unemployment than the rest of the working population. However, if they become unemployed, they stay without a job for a longer period on average.
Stefan Pfister: Companies also have an obligation in this respect. They must not be afraid of employing someone with more life experience because that person might be more expensive, overqualified or easily demotivated if the job falls below their existing skill level and expectations. In addition, demographic change will lead to the proportion of people over 50 increasing dramatically over the next few years.
Nicole Burth: This is why the government needs to take specific measures to respond to the changing situation, which must include raising the retirement age and abolishing the tax disadvantages for families and dual-earner couples. Finally, I would like to see a more modern school system that allows mothers to return to work.
Stefan Pfister: I agree entirely. We urgently need the school system to be standardized across cantonal boundaries. Among other things, that could help to increase the proportion of women in the working population, which would open up a lot of potential and make unused skills and experience available to the labor market and to businesses. Scandinavia has some good examples of solutions in this area.
Nicole Burth: It is often the case that very little needs to be done. We recently had a classic example of this. We wanted to set up a job-share, but the whole thing almost failed because we couldn’t reach an agreement about the Wednesday afternoon when both mothers had to be at home for their children.
Nicole Burth: The first thing that needs changing is the regulations on third-country nationals. If you are looking for a specific type of skilled person from a country outside Europe, but the migration quota for this country has already been filled, you have to wait until a place becomes free. We need a better and more flexible solution for specialists who are not available here in Switzerland.
Stefan Pfister: I am not a big supporter of state intervention in the market. There are some things that we in the private sector need to be able to resolve ourselves. I think the government’s responsibility is to redesign, modernize and standardize the school system. It also needs to use the necessary expertise to finally come to grips with pension reform. In the field of vocational and professional training, I would like individuals and businesses to take more responsibility. That applies in particular to companies that are primarily interested in more highly qualified employees.
Nicole Burth: One reason why we have both become involved with “digitalswitzerland” is that we have noticed that Switzerland is lagging behind other countries when it comes to digital education. Most Swiss people want to take a course that leads to an Advanced Federal Diploma. As a consequence, some people choose courses that do not meet the latest market requirements but that give them an impressive-sounding title. For example in the field of data and analytics a practical course with plenty of solid content would probably be more valuable, even if it did not result in a diploma.
Stefan Pfister: This is why it is so important for us to work on the range of courses available. We need to encourage people to take modules that provide digital skills and also ones that teach traditional content via digital channels. The cost and price structures of the current courses are very unclear and very varied. At the same time, we need to guarantee the standard of quality. KPMG and Adecco are keen to play an active role in this.
Stefan Pfister: This is a project to improve transparency and quality assurance, based on our companies’ ideas. We are now trying to bring other companies from a variety of industries on board so that we can identify solutions that will benefit all the end users. We are in discussions with universities and universities of applied sciences and also with training centers belonging to private companies. Our aim is to give the impetus to improve the Swiss labor market by means of digital learning.
Nicole Burth: In addition to making the training that is available more transparent, we also want to help people enjoy taking part in training. They need to understand what this will mean for them and how their lives will change, but also how enjoyable and satisfying it can be.
© 2020 KPMG Holding AG is a member of the KPMG network of independent firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss legal entity.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.